Abstract

Australia’s plentiful supply of coal has defined the structure of its stationary energy power generation and consumption. Economies of scale derived from large coal-fired generation have enabled the supply of affordable electricity and encouraged investment in power intensive industries. As we look to 2035, Australia’s plentiful supply of coal seam gas could dominate the future structure of its power economy but it will be subject to the vagaries of international energy price volatility and environmental costs if carbon price is applied globally. Uncertain electricity prices as a result of global energy and carbon price volatility will discourage electricity and capital intensive investment in Australia. We seek to understand the consequences of a gas-centric policy environment on Australian power in 2035.We conduct scenario analysis of the options facing the stationary energy industry by modelling the provision of electricity in 2035. In particular we seek to understand how the roll-out of large-scale solar thermal and solar photovoltaic power would alter the structure of the power economy and its ability to sustain energy-intensive industry. In order to facilitate the comparative analysis, we use a resilience index as a strategic, top down barometer of power economy performance because it allows a systematic and rational appraisal of the relative efficiency, diversity and security of power systems. Our findings provide an indicator of how energy-intensive industries will view investment in Australia over the coming decades.

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